Kavak, the leading Mexican unicorn in purchasing and selling used cars, celebrates its first anniversary in Chile. After a year of operations in the country, the company has exceeded initial expectations and has announced an investment plan of US$40 million to expand its presence in the Chilean market.
Kavak has implemented advanced technology, big data, and artificial intelligence. With these tools, the company aims to simplify the complexity of the market and improve the customer experience, facilitating safe and accessible transactions. Moreover, in its first year in Chile, Kavak has successfully established strategic alliances with prominent local financial partners, allowing more people to obtain credit for purchasing a used vehicle, an almost non-existent service in the industry.
Meanwhile, in Mexico, the company published its first “Kavak Report on the Used Car Market,” where it anticipates that 40% of its customers acquire their first car through the platform.
This fact is especially relevant considering that Kavak has facilitated access to automotive financing for many people, particularly those under 30, in this highly fragmented market with a high percentage of informality.
Kavak’s financing options have allowed more families to purchase a car. According to the report, in 2023, the percentage of users who purchased a vehicle with Kavak’s plans and had financial dependents increased from 36% to 45%. This data demonstrates the effectiveness of the company’s strategy to expand access to automotive financing.
However, the Mexican Association of Automobile Dealers (AMDA) pointed out that the sale of used cars suffered a slowdown of 7.3% during 2022 (and compared to 2019). At the beginning of 2023, used vehicle sales decreased by 10.8% in February compared to the previous month, a percentage that also resulted in a negative variation of 1.3% in March, according to the second Simindex report on the automotive industry in the country.
Despite Kavak’s report, it is essential to consider that several startups have been affected by a lack of investment, including the automotive industry, which slowed down due to a lack of supplies during the COVID-19 pandemic. Despite this slowdown, its valuation is expected to increase by 25% by 2026, thanks to the boom in electric cars. So, when it comes to investing, companies that incorporate cutting-edge technology that offers security to users, comfortable loans, and, above all, are committed to energy transformation.